Texas proposal would tax travel agency service fees: Travel Weekly


ASTA denounced a new bill in the Texas House of Representatives which, if passed, would impose taxes on travel services related to hotel reservations in the state.

The bill would impose a 6% tax on the price paid for a room or space in a hotel. But the invoice further specifies that the price includes “the cost of booking or reserving the room or space”.

“So any fees that travel counselors charge their clients for hotel reservations in Texas would be subject to state sales and local taxes which they are not today,” said Eben Peck. , ASTA’s Executive Vice President of Advocacy, in a statement.

The Company has launched a base portal and calls on advisers and other industry stakeholders to reach out to lawmakers in opposition to the proposed tax.

Peck said the bill targets large online travel agencies (OTAs) but does not distinguish between OTAs and physical agencies.

This is particularly problematic, Peck said, as many agencies now charge clients a service fee to no longer depend on vendor commissions.

“In 2019, a year when travel agencies booked $ 33 billion worth of hotel rooms, 45% of agents charged a fee for hotel-only reservations and 42% a fee for an airplane, hotel package. and car, ”Peck said. “These fees are billed for a service – saving consumers time and money by helping them navigate a travel market that offers an impressive number of options. ASTA’s long-standing position is that these revenues, already subject to existing federal and state taxes, should not be taxed a third time through the taxes traditionally applied to hotel room stays. “

Peck said the Company is opposed to the bill now even more than normal due to the uphill battle travel agencies face in the wake of the coronavirus crisis. He called it “the worst possible time to raise taxes on the travel agency industry.”

ASTA is no stranger to the fight against the proposed new taxes, having managed to knock down a number of these measures.

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